Britain caves in to EU demand on first day of Brexit talks

BRUSSELS • Britain has lost its first battle with the European Union over the timetable for Brexit talks.

On day one of the negotiations on Monday, Prime Minister Theresa May's government gave in to EU demands to discuss the terms of its divorce - including an exit fee - before any consideration of the trade deal Britain wants with Europe.

Yet, reflecting on the start of negotiations, British Finance Minister Philip Hammond called it positive, although he warned of protectionist moves by the EU.

Europe's chief negotiator Michel Barnier bluntly delivered a clear rebuff to Mrs May's stated ambition of wrapping up a new free trade agreement quickly.

"I'm not in a frame of mind to make concessions," Mr Barnier told reporters in Brussels. "The UK has decided to leave the EU. It's not the other way around." This uncompromising stance is "not about punishment" or "revenge", but simply a consequence of Britain's decision to exit, he said. "The consequences are substantial."

British Brexit Secretary David Davis said the country had not backed down over when talks could turn to a future trading relationship. When the EU "decides we have made enough progress - their words - both sets of dialogues will continue, including free trade", he added.

Britain and EU hope the first phase of talks focusing on the exit terms will conclude by October, allowing trade negotiations to begin.

UNCOMPROMISING STANCE

I'm not in a frame of mind to make concessions. The UK has decided to leave the EU. It's not the other way around.

EUROPE'S CHIEF NEGOTIATOR MICHEL BARNIER, rebuffing British Prime Minister Theresa May's stated desire to wrap up a new free trade agreement quickly.

Solving the vexed question of keeping the peace and an open border between the British province of Northern Ireland and the Irish Republic - an EU member - will be an urgent priority in the talks, Mr Barnier and Mr Davis agreed.

Mr Hammond conceded yesterday that the world's fifth-biggest economy faced tough times as it tries to avoid a "cliff-edge"departure. "Our departure from the EU is under way. But ensuring that it happens via a smooth pathway to a deep and special future partnership with our EU neighbours - one that protects jobs, prosperity and living standards in Britain - will require every ounce of skill and diplomacy," he said in a speech. "Yesterday was a positive start. It will get tougher. But we are ready for the challenge."

Mr Hammond also said Britain would almost certainly need an implementation period on its exit from the EU's single market and its Customs union.

Speaking to an audience packed with banking executives, he also took a swipe at moves by the EU to try to shift some of Britain's financial services to the bloc.

"We are already hearing protectionist agendas being advanced, disguised as arguments about regulatory competence, financial stability and supervisory oversight," he said. "We can have no truck with that approach."

Meanwhile, German Chancellor Angela Merkel yesterday urged the EU's remaining 27 members to stick together during the Brexit talks. "The risk of the exit negotiations with Britain is that we do not take adequate care of our own future. Let's stay together, let's not divide from each other," she said.

BLOOMBERG, REUTERS

A version of this article appeared in the print edition of The Straits Times on June 21, 2017, with the headline 'Britain caves in to EU demand on first day of Brexit talks'. Print Edition | Subscribe